NEW YORK — Despite the weakening dollar and the continued appreciation of the peso, there is no recorded slowdown in terms of remittances to the Philippines, according to Finance Secretary Margarito Teves.

“Fortunately, there has been no slowdown yet. That’s rather a pleasant surprise because I would have expected those who are earning dollars to be affected. So far, with the volume of remittances and based on Central Bank projections, remittances will probably reach close to $15 billion this year,”

Teves told the Asian Journal in an interview after the ASEAN Finance Ministers Investment Seminar at the Citi Headquarters in downtown Manhattan Tuesday, Oct. 23.

The lack of slowdown does not mean that the government will be complacent, according to Teves.

“We have to find a way of continuing their support for us by two ways, which we need to manifest as soon as possible,” he shared.

For those who are not inclined to engage in business, Teves suggests that they look at peso-denominated bonds and for those who are inclined, he proposes that the government should help them get into microfinance or microenterprises as well as small-to-medium enterprises.

“They’re also benefiting from gradual increase in property prices so that’s somehow going to compensate for I guess what they are suffering, those who are earning dollars. That’s the thing that probably also motivated them,” Teves added.

Engine of growth

Teves joined other ASEAN finance ministers at the meeting with investors, dubbed “Borderless ASEAN – Stronger, Soaring Together”. After the conference, they held a press briefing to discuss, among others, trade and investment opportunities in the region.

“Much attention has been paid to two fast-growing Asian economies – China and India. Asean’s performance and economic conditions are equally encouraging. We have placed programs to further integrate our economies and encourage our levels of sustainable growth,” Teves, who read the finance ministers’ statement, said.

The group hopes to continue raising investors’ awareness about Asean and its standing as a major engine of growth in Asia and that Southeast Asian member countries have taken various measures to speed up mechanism restructuring and economic reforms in the last ten years after the 1997 Asian financial crisis.

“Asean economies have posted a 5.5% growth for the past four years, and this year, they are looking at a growth of at least 6%,” the statement said.

Ranking 4th

A recent U.N. report listed the Philippines as the fourth highest recipient of remittance from migrant workers, after India, Mexico and China.

Asked for a reaction, Teves replied, “I am not surprised at all because we have a large number of overseas Filipinos and it’s really in a way unfortunate on the one hand that a lot of Filipinos need to go to other countries for lack of employment of meaningful employment opportunities at home.”
An estimated 10% of the country’s population, or about eight million Filipinos form the Filipino diaspora.

“As a policy, that’s not really what we wanted but we need to continue improving the growth of our economy especially at the higher sustainable level so we can stem the outflow of overseas Filipinos. So, it becomes a matter of choice for them to go out rather than need. So far, because of the large increase in the population, we need to generate more employment opportunities,” Teves explained.

Subprime

Apart from the weak dollar and high oil prices, Asean finance ministers are closely monitoring how the subprime crisis would eventually affect the U.S. economy.

“We are all waiting to see its impact on the U.S. economy and we’re watching very closely,” said Tharman Shanmugaratnam, Singapore’s Minister for Education and Second Minister for Finance.

“If there is going to be a significant impact, then it will have an effect to the rest of the world,” he added.

Weak dollar

The impact of the weak dollar on Thailand’s economy has been quite a challenge, according to Thai Finance Minister Chalongphob Sussangkarn. “There’s too much U.S. dollar going around the world,” he added.

“The depreciation of the dollar has been helpful to the Philippine economy but there are concerns at the export sector and among overseas Filipinos,” Teves explained.

He added the weak dollar is not the only reason why the country’s economy is doing good but a combination of reasons, among them the peso’s appreciation, lower inflation rates and lower interest rates, all contribute to show that the country’s macro-economic fundamentals are in place.

Teves added that the ideal situation would be a gradual adjustment of the peso so that the affected sectors like exporters and overseas Filipino workers can adjust.

“The peso will continue to appreciate as long as our macro-economic fundamentals are also improved,” Teves said.